40 Contract Management ∕ November 2016

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Reason for Dismissal #3—“Abuse of Process”Here’s where things get really interesting. While the first two grounds for dismissal may have been yawn-inducing, the third reason GAO dismissed this protest is a different story. The third reason was for “abuse of process,” an exceptionally rare reason, sure to intrigue even the most battle-hardened and desensitized contracting professional. From the “Digest” section of GAO’s protest decision:

Protest challenging the issuance of a task order to a large business con-cern is dismissed for abuse of process, and the protester is suspended from protesting for a period of one year, where the protester has…repeatedly failed to demonstrate that it is capable of, or interested in, performing the solicited requirements; and has repeatedly failed to engage constructively on the substantive and threshold issues raised by its protests.13

At the risk of understating the situation, the careful reader will de-tect that GAO seems to be slightly annoyed. Anyone familiar with GAO bid protests recognizes that GAO usually takes great pain to pen sober, calm, and detached decisions, devoid of any passion-ate accusations. This decision was distinctly different—questioning motives, criticizing the content of protest filings, and complaining about “abusive” and “baseless” accusations found therein.14 In short, this is not the typical GAO bid protest decision. Something else is afoot.

What Led GAO to Sanction a Protestor?To set the stage for GAO’s decision, it is first important to note that Latvian Connection is no stranger to the GAO bid protest pro-cess. In fact, one could argue, at least in GAO’s view, that Latvian Connection may be too familiar with the process. Based on GAO’s reaction in its decision, it is clear that the firm’s year-long suspen-sion was not because of this individual protest, but rather due to the sheer volume of protests it had filed in the past. According to GAO:

Our records show that Latvian Connection has filed an additional 296 protests in prior fiscal years; almost all of these protests were filed in the last five years. In addition, the firm has filed 9 requests that it be reim-bursed its protest costs (all were dismissed as legally insufficient), and 40 requests for reconsideration (4 pending, 3 dismissed as untimely, and 33 dismissed as legally insufficient).15

Further, Latvian Connection had a unique ability to produce not only an impressively high volume of protests over the course of a fiscal year, but also the ability to launch a rapid-fire volley of protests in a single week:

In a single week in fiscal year 2015, Latvian Connection filed 59 separate protests challenging what the protester termed were Air Force solicitations. All 59 protests were dismissed when it became evident that the 59 solicita-tions that Latvian Connection was challenging did not actually exist.16

According to GAO, Latvian Connection filed enough protests to demonstrate a “pattern of vexatious protesting that dates back several years.”17

In legal terms, a proceeding is said to be vexatious “when the party bringing it is not acting bona fide, and merely wishes to an-noy or embarrass his opponent, or when it is not calculated to lead to any practical result.”18

Does GAO Have the Authority to Ban or Suspend a Protestor?This case presents a number of colorful issues, but the most rel-evant question for legal scholars is whether the GAO bid protest forum actually has the power to ban or suspend protestors. There is no mention of the power to ban or suspend protestors in the GAO bid protest statutes19 or regulations.20 In fact, two different statutory sections say that GAO “shall” decide protests, indicating that a ban or suspension may be improper:

A protest concerning an alleged violation of a procurement statute or regulation shall be decided by the Comptroller General if filed in accor-dance with this subchapter.21

To the maximum extent practicable, the Comptroller General shall provide for the inexpensive and expeditious resolution of protests under this subchapter…. [T]he Comptroller General shall issue a final decision concerning a protest within 100 days after the date the protest is submit-ted to the Comptroller General.22

Just like the statutes, the regulations also command GAO to handle bid protests using “shall” language: “GAO shall issue a decision on a protest within 100 days.”23

Therefore, GAO has a statutory and regulatory responsibility to decide legitimate bid protests. But is there any authority for GAO to shirk this responsibility? The regulations dealing with protective orders discuss “sanctions,” but these sanctions are directly tied to the violation of a protective order:

Any violation of the terms of a protective order may result in the imposi-tion of such sanctions as GAO deems appropriate, including referral to appropriate bar associations or other disciplinary bodies, restricting the individual’s practice before GAO, prohibition from participation in the remainder of the protest, or dismissal of the protest.24

Latvian Connection’s ban did not have anything to do with a viola-tion of a protective order, so GAO could not rely on this provision.

The regulations concerning remedies available to the GAO bid protest forum do not mention the power to ban or suspend pro-testors, either. Rather, the available remedies include recommen-dations to agencies to terminate, re-compete, or award contracts. There is language that might provide GAO flexibility in “other

46 Contract Management ∕ November 2016

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The “Rule of Two” (FAR 19.502-2(b)):b) Before setting aside an acquisition under this paragraph, refer to 19.203(c). The contracting officer shall set aside any acquisition

over $150,000 for small business participation when there is a reasonable expectation that—1) Offers will be obtained from at least two responsible small business concerns offering the products of different small busi-

ness concerns (see paragraph (c) of this section); and 2) Award will be made at fair market prices. Total small business set-asides shall not be made unless such a reasonable ex-

pectation exists (see 19.502-3 as to partial set-asides). Although past acquisition history of an item or similar items is always important, it is not the only factor to be considered in determining whether a reasonable expectation exists. In making R&D small business set-asides, there must also be a reasonable expectation of obtaining from small businesses the best scientific and technological sources consistent with the demands of the proposed acquisition for the best mix of cost, performances, and schedules.

13 CFR 125.2(c)(1):c) Procuring Agency Responsibilities—

1) Requirement to Foster Small Business Participation. The Small Business Act requires each Federal agency to foster the partici-pation of small business concerns as prime contractors and subcontractors in the contracting opportunities of the Govern-ment regardless of the place of performance of the contract. In addition, Federal agencies must ensure that all bundled and consolidated contracts contain the required analysis and justification and provide small business concerns with appropriate opportunities to participate as prime contractors and subcontractors. Agency acquisition planners must:i) Structure procurement requirements to facilitate competition by and among small business concerns, including small

business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, 8(a) BD small business concerns (including those owned by ANCs, Indian Tribes and NHOs), and small business concerns owned and controlled by women;

ii) Avoid unnecessary and unjustified bundling of contracts or consolidation of contract requirements that inhibits or pre-cludes small business participation in procurements as prime contractors;

iii) Follow the limitations on use of consolidated contracts;iv) With respect to any work to be performed the amount of which would exceed the maximum amount of any contract for

which a surety may be guaranteed against loss under 15 U.S.C. 694b, to the extent practicable, place contracts so as to allow more than one small business concern to perform such work;

v) Provide SBA the necessary information relating to the acquisition under review at least 30 days prior to issuance of a solicitation. This includes providing PCRs (to the extent allowable pursuant to their security clearance) copies of all documents relating to the acquisition under review, including, but not limited to, the performance of work statement/statement of work, technical data, market research, hard copies or their electronic equivalents of Department of De-fense (DoD) Form 2579 or equivalent, and other relevant information. The DoD Form 2579 or equivalent must be sent electronically to the PCR (or if a PCR is not assigned to the procuring activity, to the SBA Office of Government Contract-ing Area Office serving the area in which the buying activity is located);

vi) Provide opportunities for the participation of small business concerns during acquisition planning processes and in acquisition plans; and

vii) Invite the participation of the appropriate Director of Small and Disadvantaged Business Utilization in acquisition plan-ning processes and provide that Director with access to acquisition plans.

20. See 4 CFR 21.0–21.14.21. 31 USC 3552(a) (emphasis added).22. 31 USC 3554(a)(1) (emphasis added).23. 4 CFR 21.9(a).24. 4 CFR 21.4(d).25. 4 CFR 21.8(a)(6).26. PWC Logistics Servs. Co. KSC(c), B-310559 (January 11, 2008).27. Latvian Connection LLC, see note 1.28. GAO 2009 Report to Congress, see note 3.29. Ibid.

30. Ibid. For this first definition of frivolous as filed, GAO cited Abbs v. Principi, 237 F.3d 1342, 1345 (Fed. Cir. 2001), citing State Indus., Inc. v. Mor-Flo Indus., Inc., 948 F.2d 1573, 1578 (Fed. Cir. 1991). See also International Union of Bricklayers Etc. v. Martin Jaska, Inc., 752 F.2d 1401, 1406 (9th Cir. 1985) (“frivolous appeal is defined as one in which the result is obvious, or where the appellants’ claims are utterly meritless”).

31. Ibid. For this second definition of frivolous as argued, GAO cited Abbs v. Principi, 237 F.3d at 1345; and Lawrence N. Sparks v. Eastman-Kodak Co., 230 F.3d 1344, 1345 (Fed. Cir. 2000). See also Finch v. Hughes Aircraft Co., 926 F.2d 1574, 582 (Fed. Cir.1991).

32. GAO 2009 Report to Congress, see note 3.33. Ibid.34. Ibid.

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35. Ibid.36. Ibid.37. Ibid.38. Latvian Connection LLC, see note 1.39. Ibid.40. In legal terms, bad faith is an “intentional dishonest act by not fulfilling legal or

contractual obligations, misleading another, entering into an agreement with-out the intention or means to fulfill it, or violating basic standards of honesty in dealing with others.” (Definition of “bad faith,” The People’s Law Dictionary, www.dictionary.law.com.)

41. This is one excellent way to stay up-to-date on the practice of contract manage-ment (as outlined in Christoph Mlinarchik, “Secrets of Superstar Contracting Professionals,” Contract Management Magazine (May 2014)). To subscribe to a daily digest of GAO comptroller general legal decisions, visit www.gao.gov/sub-scribe/index.php.

42. All interview questions and answers derive from personal communications between the author, Christoph Mlinarchik, and Keven Barnes in August 2016. The interview was conducted on behalf of Contract Management Magazine. The opinions of Keven Barnes are solely his own, and do not necessarily represent the opinions of Christoph Mlinarchik, Contract Management Magazine, or NCMA.

43. The “Rule of Two” is outlined at FAR 19.502-2(b)(1)–(2).

ABOUT CHRISTOPH MLINARCHIK, JD, CFCM

� Attorney, professor, expert witness, consultant, and frequent speaker on government contracts

� Senior policy advisor, ByteCubed LLC, supporting clients in the Office of the Secretary of Defense (Acquisition, Technology, and Logistics)

� Founder, Christoph LLC

� Teaches courses on acquisitions, contracting, proposals, bid pro-tests, and government contract law nationwide

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л www.ChristophLLC.com { Christoph@ChristophLLC.com ^ /in/christoph-mlinarchik-31b55477